Whole life and indexed universal life propelled overall life sales in the third quarter according to new data from LIMRA.
Total individual life insurance premium grew three percent both in the third quarter and in the first nine months of 2012, according to LIMRA’s Third Quarter 2012 Life Insurance Sales Survey.
Whole life, which had the most robust performance in the third quarter, improved five percent. Whole life also rose eight percent in the first nine months of 2012. Almost 75 percent of whole life writers experienced positive growth with the overall whole life policy count growing two percent in the quarter rendering an increase of four percent during the first three quarters of 2012.
The report found that sales were largely driven by indexed universal life. Indexed universal life sales were able to eclipse universal life sales in the third quarter; an unprecedented event. Growing at 39 percent for the quarter and 32 percent for the first nine months of the year, indexed universal life sales reached a record-level of the universal life market share, representing 28 percent of the overall universal life market.
Universal life new annualized premium rose four percent in the third quarter compared with the same period in 2011 and is three percent higher year-to-date.
Guaranteed universal life premium was strangled by low interest rates and higher capital requirements and dropped 10 percent for the third quarter and nine percent year-to-date.
Overall universal life policy count fell nine percent in the quarter and one percent during the first three quarters of 2012.
Term life premium dropped one percent in the third quarter and in the first nine months of 2012. LIMRA feels that term life sales will increase incrementally, reaching 2009 levels in three or four years as unemployment rates begin to decline.
Variable universal life fell four percent in the third quarter, dropping six percent yer-to-date. Variable universal life policy count fell 12 percent in the third quarter and 10 percent for the first nine months of 2012.
Ashley Durham, senior analyst, LIMRA research said of whole life and indexed universal life, “Both product lines have consistently performed well under challenging economic conditions because they offer consumers the opportunity for steady growth while protecting their principle from the prolonged market volatility.”